ATMs, long a valuable resource for cardholders wanting ready access to cash, have become a growing target for crooks who like them for similar reasons, according to a researcher from ACI Worldwide.
About one-third, or 29%, of consumers across eight major economies reported in December that they had been victims of card fraud during the previous five years, up from 18% who said they were in a similar survey conducted in 2009, according to ACI Worldwide’s 2010 Global Card Fraud Survey.
“ATM blitz attacks” were the main cause of the increase in reported card fraud last year, Jasbir Anand, ACI senior solutions consultant, tells PaymentsSource. Such crime occurs when organized groups with knowledge of existing prevention measures schedule coordinated attacks. Instead of fraudulently accessing card accounts over time, they hit many accounts at once, he notes
“They are not only extracting larger amounts of funds but also accessing a larger number of accounts faster,” Anand says.
Though reports of card fraud were up, financial institutions around the world did a better job responding to that fraud, ACI’s research found.
For its latest research, ACI Worldwide surveyed 4,200 consumers from 14 countries online in December. The eight economies ACI highlighted in its survey report were Australia, Brazil, China, Dubai, Germany, Singapore, the United Kingdom and the United States.
Fraud detection tends to focus on identifying compromised card accounts after they are used at the same locations. But this fraud-detection process often takes weeks or months to resolve, and crooks today are running multiple, consecutive attacks at one time that are difficult to identify until after the fraud is committed, says Anand.
Issuers, however, are responding better to card-fraud complaints, as 79% of card-fraud victims in 2010 said they were satisfied with the response from their financial institution, up from 75% who were in 2009.
Asked how pleased they were with their financial institution’s response to card fraud, 62% of U.S. respondents said they were “very happy,” up from 55% who said so in the 2009 survey (see chart). Concurrently, only 12% of U.S. respondents said they were “unhappy” with the treatment they received from their issuer after a fraud attack, down from 16% who were in 2009.
Globally, the main reason survey respondents said they were happy was because of how quickly their issuer refunded their accounts. Some 34% of respondents said speed of refund was most important, followed 27% who cited financial institutions’ ability to identify when fraud occurred before they did.
However, 40% of U.S. respondents said issuers identifying fraud before cardholders did was most important, while 32% said the refund was most important.
The U.S. card networks’ zero-liability policies that make consumers not responsible for card-fraud losses also helped keep U.S. consumers happy with their issuers, Anand says.
Asked if consumers had confidence in their financial institution to protect them from card fraud, 81% of respondents globally said they were, while 19% said their banks could do more to protect them.
Staying focused on victim assistance can help financial institutions stay in good standing with cardholders, says Anand. “Financial institutions should take an active role in restoring consumers’ accounts and credit records to maintain overall satisfaction,” he says.
